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Tuesday, October 30, 2012

Turkish Banks Go for Gold to Lure $302 Billion Hoard

By Sibel Akbay -
Oct 29, 2012 6:01 PM ET

Deniz Kalkan, a 32-year-old
housewife in Istanbul, is ready to move her gold.
“I’ll put these in a deposit account as soon as I get the
time,” Kalkan said of the half-dozen gold coins she has
collected and stashed in her apartment. “It’s much safer to
keep them in the bank than at home.When Kalkan brings in her coins, she’ll be joining a wave
of Turks responding to a drive to lure an estimated $302 billion
of hidden gold into the economy to help ease the nation’s
current-account deficit, the world’s biggest after the U.S.
Gold-based deposit accounts surged 15 percent this year through
the end of July, three times the increase in standard savings
accounts, according to the central bank.
The gold accounts give customers an amount in Turkish lira
equivalent to the weight of the precious metal they turn over to
the bank. They can then withdraw cash or take out loans, while
the lender is able to sell or hold onto the gold.
At Yapi Kredi Bankasi AS (YKBNK), owned by UniCredit SpA (UCG) and Koc
Holding AS (KCHOL), deposits in gold-based mutual funds, which invest at
least 51 percent of their money in precious metals and offer a
guaranteed return on capital, increased 62 percent in 2012.
Turkiye Is Bankasi AS (ISCTR), Turkey’s largest bank by assets, said
gold deposits increased 10-fold in the two years through June.
The campaign by Turkey’s banks, featuring ads for “golden
age” accounts and products such as gold gift checks, is
targeted at Turks who traditionally give gold coins or jewelry
as presents at weddings, births and circumcision ceremonies.